BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair SB 35 (Padilla) Hearing Date: 05/16/2011 Amended: 04/26/2011 Consultant: Brendan McCarthy Policy Vote: EU&C 10-0 _________________________________________________________________ ____ BILL SUMMARY: SB 35 repeals the existing public goods charge paid by electricity ratepayers. The bill creates a new energy-related research, development, and demonstration program. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Administering new Unknown costs, likely in the tens of General research program millions per year. _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Under current law, customers of the state's investor owned utilities pay a public goods charge on their electricity bills. Revenues from the Public goods charge pay for programs to support energy efficiency, renewable energy, and public interest research and development. The Public Interest Energy Research Program is funded with $77 million per year from the public goods charge and is administered by the California Energy Commission. The Public Interest Energy Research Program provides research funds for new and emerging energy technologies that would not otherwise be funded from private or academic funds. The authority to collect the public goods charge sunsets on January 1, 2012. (There is a separate $24 million per year research program that is funded by a surcharge on natural gas customers. That program does not have a sunset date and is not impacted by this bill.) SB 35 repeals the authority to collect the public goods charge SB 35 (Padilla) Page 1 and the statutes that direct how resulting revenues are spent, including the Public Interest Energy Research Program. The bill creates a new California Energy Research and Technology Program, to be overseen by a new council with specified membership and administered by the California Energy Commission. The bill includes criteria for governing the program and prioritizing research funding. The bill requires the Energy Commission to establish criteria for tracking the outcomes of research funded under the program and requires the Commission to establish terms for sharing intellectual property interests or royalties from research funded under the program. The Energy Commission is required to report annually to the Legislature on program activities. The bill does not specify the size of the new program or the funding source. Based on the operation of the existing Public Interest Energy Research program, the proposed program costs are likely to be in the tens of millions per year. SB 410 (Wright) extends the sunset of the public goods charge. That bill will be heard in this committee. AB 723 (Bradford) extends the sunset of the public goods charge. That bill is in the Assembly Appropriations Committee. AB 1303 (Williams) extends the sunset of the Public Interest Energy Research program. That bill is in this Assembly Appropriations Committee.